Accuracap PicoPower

Investment Philosophy

Accuracap PMS’s Picopower strategy is a small-cap focused quant strategy that constructs a portfolio of 30–40 high-quality companies using an Artificial Intelligence–based Intelligent Ranking Algorithm. The strategy is run by the founding team, Naresh Gupta who is a pure quants with deep expertise in computer science, big data analytics, and machine learning. The algorithm is driven by fundamental factors and risk management, with stocks exited if they fall below the ranking cut-off. The portfolio is typically rebalanced annually, with an average historical holding period of around two years, aiming to remove emotional bias from decision-making.

Portfolio Construction

• Low churn and tax efficient: Average holding period of ~2 years, resulting in long-term capital gains. The strategy remains fully invested and does not attempt to time the market.
• Portfolio rebalancing: Conducted on a pre-defined schedule, typically once a year.
• Exits: Stocks are exited if their rank falls below the cut-off at the rebalance date and are replaced by higher-ranked stocks, while keeping portfolio size constant.

AMC Background

AccuraCap is a differentiated quant-focused PMS that uses Big Data and Behavioural Analysis to drive its investment strategies. Established in 2009 by two computer scientists to manage their personal capital (and expanded to public money in 2011), AccuraCap is among the few pure-play quant PMS providers in India. The firm is led by its founders, Naresh Gupta, who bring deep expertise in computer science, big data analytics, and machine learning.

The strategy was tested on the founders’ own capital prior to being offered to investors and has built a track record of over a decade. This long operating history, combined with strong founder alignment and technical pedigree, distinguishes AccuraCap within the domestic quant PMS space.

Investment Philosophy

AccuraCap PMS follows a pure quant strategy, where proprietary algorithms driven by Big Data and Behavioural Analysis are used for stock selection and portfolio construction. These algorithms were developed by the founding team, both of whom have senior management-level experience in Artificial Intelligence, Big Data, and computational technologies.

The algorithm is designed to identify quality businesses with durable moats that are available at reasonable valuations, with an intent to hold investments over the medium to long term. The same philosophy governs exits, with the portfolio reviewed quarterly for any deterioration in business fundamentals, prompting exits where required. This process is designed to minimise emotional bias in investment decisions.

The investment team is strongly aligned with investor outcomes:

• Skin in the game: More than 50% of the total corpus is invested by the promoters.
• Fee structure: No arbitrary hurdle rates; performance is benchmarked against relevant indices, with profit-sharing only on alpha generated over the benchmark.

Algorithm

AccuraCap’s proprietary ranking algorithm conducts extensive spatio-temporal analysis of businesses, comparing each company across peers over time. This process helps narrow the investment universe to a subset of high-quality businesses. The algorithm then applies the “Pendulum Hypothesis,” investing in these businesses when valuations are reasonable. The portfolio follows an equal-weighted construction approach, allowing the system to systematically retain winning positions and eliminate underperformers at regular intervals.

AccuraCap’s Edge

Unlike many quant strategies, AccuraCap’s approach remains fundamentally oriented, while also exploiting market psychology. The strategy is risk-averse and conservative, with no arbitrary sector or stock weightings, enabling disciplined and emotion-free decision-making.

Suitable For

Investors seeking to leverage advanced computing technologies such as Big Data, Artificial Intelligence, and Behavioural Analysis through a quant-driven investment management approach.